Getty ImagesMcDonald’s boss has apologized to customers over an E. coli outbreak in the United States linked to the chain’s Quarter Pounders, a new setback for a chain that has been struggling with sluggish sales.
“We are sorry for our customer’s experience,” said its CEO Chris Kempczinski. “We offer our sincere and deepest sympathies and are committed to correcting this issue.”
Executives told investors they believed the public health scare was under control and would not have a significant impact on sales.
But they admit it has added to pressure on the company as budget-conscious customers eat out less.
“While we anticipate a challenging environment in 2024, our results so far this year have fallen short of expectations,” Kempczinski said while discussing the company’s latest update to investors.
McDonald’s said on Tuesday that sales at stores open at least a year fell 1.5% in the three months to September compared with the same period last year.
Its international markets have been particularly hard hit, notably the UK, France, China and the Middle East.
It was the second consecutive quarter of sales decline after falling 1% in the previous three months and the largest decline in four years.
Kempczinski said the company is focused on delivering “value and affordability” as customers continue to “watch their spending.”
He said McDonald’s was pleased with signs of improvement in the US market, having launched a $5 (£3.85) Happy Meal promotion over the summer and luring customers with a new chicken sandwich.
This quarter, that helped the company achieve 0.3% sales growth at U.S. stores open at least a year.
McDonald’s is now hoping to replicate this success in other markets such as the UK, where the chain has launched products such as a £3 set meal for three and a £2.75 breakfast set.
Executives said there was also excitement around the UK debut of the popular ‘Grimace’ milkshake.
“We’re starting to see progress,” Chief Financial Officer Ian Boden said, adding that the company expected its operations in the Middle East to continue to be affected by conflicts in the region.
Bosses told investors they did not expect to significantly increase prices until the business performed better, noting they still faced “a lot of headwinds” from customers.
The impact of the U.S. E. coli outbreak, which has recorded at least 75 patients, was not reflected in results reported on Tuesday, which showed total quarterly revenue rising 3% to more than $6.8 billion (pounds). 5.2 billion), compared with a year ago.
Profits fell 3% to $2.25 billion.
Borden said the public health scare had reversed signs of improving U.S. sales and traffic, but said the company was confident it could restore customer confidence.
“The most important event is behind us,” he said. “To get our business back to really strong momentum – we’re confident in our capabilities.”
McDonald’s said on Monday it would begin resuming sales of Quarter Pounders, which were suspended last week at about a fifth of its U.S. restaurants.
The company has indefinitely stopped working with Taylor Farms, which has been its onion supplier and is believed to be the source of the contamination.
